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Question: Will you support Gavin's new block size limit hard fork of 8MB by January 1, 2016 then doubling every 2 years?
1.  yes
2.  no

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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1806411 times)
sgbett
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March 16, 2015, 03:03:00 PM
 #22021

Fiatcoin is nearly here:

http://www.reuters.com/article/2015/03/12/us-bitcoin-ibm-idUSKBN0M82KB20150312\

Quote
Unlike bitcoin, where the network is decentralized and there is no overseer, the proposed digital currency system would be controlled by central banks, the source said.

"These coins will be part of the money supply," the source said. "It's the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain."

Nice.  Now they won't even have to turn on the printing presses.  Just type in a big number and hit enter.

I'm assuming this means we then get accurate insight into exactly what the money supply is. No more shadowstats! No more government handwaving about inflation!

Not such a bad thing?

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inca
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March 16, 2015, 04:04:30 PM
 #22022

Fiatcoin is nearly here:

http://www.reuters.com/article/2015/03/12/us-bitcoin-ibm-idUSKBN0M82KB20150312\

Quote
Unlike bitcoin, where the network is decentralized and there is no overseer, the proposed digital currency system would be controlled by central banks, the source said.

"These coins will be part of the money supply," the source said. "It's the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain."

Nice.  Now they won't even have to turn on the printing presses.  Just type in a big number and hit enter.

I'm assuming this means we then get accurate insight into exactly what the money supply is. No more shadowstats! No more government handwaving about inflation!

Not such a bad thing?

Or likely to come to pass!
rocks
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March 16, 2015, 05:56:12 PM
 #22023

On forkability in general, I see it as a great strength, not a weakness. It means that the economic majority is always in control even when major changes have to be made.

As a side note, I find it cumbersome during deeper analysis to think in terms of "Bitcoin." Rather, I think more fluidly in terms of the economic majority ledger (currently known as the Bitcoin ledger). Forking the protocol is largely powerless* to affect the economic majority ledger, because - by the same logic as in my previous two posts - the new protocol fork only retains control of the economic majority ledger to the extent that the protocol change is compelling to the economic majority.**

Since every differentiated protocol fork (here I mean altcoins) has so far created an entirely new ledger, of course they aren't very compelling to the economic majority, receiving at most tepid investment interest. A spin-off would be based on the economic majority ledger, so it would have a great advantage over an altledger/altcoin, though if it wasn't compelling it would just be sold off by bitcoin holders for more bitcoins.

If a substantially different protocol fork or spin-off is ever more compelling to the economic majority, and of course using the same ledger is the first requirement for that, it would be adopted. The economic majority retains their ledger with their wealth in all cases. Bitcoin-the-protocol may be no more, but the ledger stays so bitcoin holders have nothing to fear except a re-naming.

Suppose a substantial segment of the economic majority shows interest in some change you find repulsive. Likely many others will agree with you, so in some unlikely scenarios you will potentially have two ledgers form over time.** If this does occur, it's the most amazing form of democracy (not voice democracy, but exit democracy) because everyone can use the system they want without compromise. However, again, there is a strong tendency to simply converge on ideal money based on the wisdom of (investing) crowds.

For instance, if we suppose a substantial segment of the economic majority shows interest FedCoin, then the legal situation may make it likely that the two coexist, with Bitcoin either on the black market in that country or competing directly with FedCoin. In that case, again, exit-democracy prevails and the Feds have no more tools to corrupt cryptocurrency than they do now (see the arguments in my two previous posts).

Here's another important implication of thinking in terms of the economic majority ledger: Bitcoin issuance is not limited to 21 million coins because of the protocol, but because of the exit-democratic consensus of the economic majority. It is incorrect to say we have moved from an era of control by central bankers to an era of control by mathematics. We have moved to an era of control by the economic majority.

This is a great advance, but not because "no one" can change the protocol, but because no one can force any group of people to stop using it. To effectively change the coin limit, you have to either convince the economic majority to do so, which is a herculean task, or convince some subset of the economic majority - but then that doesn't affect the rest of the people. That means the coin limit could change (for example, in 50 years to deal with mining incentives), but not without a reason that is so incredibly compelling that it sways all or most of the economic majority - in which case the typical bitcoiner should probably not worry, despite how bad it sounds, because the economic majority has those same reservations to overcome. And also we know that the change wouldn't allow for any net-harmful degree of continuing inflation or other effects, because the wisdom of the economic majority would be behind it.***

This is the kind of guarantee Bitcoin provides; it's essentially a decentralized governance where voice vs. exit is fully exercised at all times. What Bitcoin provides is not a guarantee by code or math, rather code and math are what enforce the "edicts" of this decentralized governance structure subject to the continual pressures of voice and exit backed by investment flows.

If, for example, the economic majority believes that increasing max_blocksize to 20MB or shorter block times or Turing completeness will make the protocol for updating the economic majority ledger more compelling, a fork incorporating these changes would thrive and beat out the Bitcoin Classic protocol.

So to me, all that's required for Bitcoin-the-ledger to survive in perpetuity and make every investor rich is for the protocol to be upgraded if and only if the economic majority deems it truly compelling, with all the prudence about viability that that entails. Forking makes that happen, giving that critical exit option to balance voice, which in Bitcoin is already vastly superior to government democracy voice since it's backed by actual money.

*So far around 90% powerless, considering the combined market cap of all the altledgers compared to the economic majority ledger (Bitcoin).

**Although some kind of 50/50 or 40/60 split could happen in theory, the incentives involved make it seem unlikely in practice - and even if it does happen (because both forks are highly compelling in their own right), the market can only support a few such splits because there are only so many protocol feature sets to compete on through differentiation.

***If you're skeptical of the wisdom of the economic majority, first realize this is what controls Bitcoin right now, in fact, as is the theme of this post. Secondly realize this is as good as it gets; there is no way to create a system smarter than the economic majority, at least not without centralization (and in my opinion not even then). Third, if you're convinced that prediction markets are a huge deal, this should be appealing for the same reasons. If you're not sold on prediction markets, read the five numbered documents here. Although Truthcoin may be a misguided system, Paul Sztorc's arguments on the importance of prediction markets are impressive.

Excellent post, thank you.

As you stated, bitcoin is a more democratic form of money, where the economic majority have a voice and a small group cannot control the system. This is one of the most beautiful aspects of the system. Additionally any minority of users can always choose to stay on the ledger/path they choose.

I think where we differ is in how much confidence to place in the decisions of the economic majority. Your position is that you trust the economic majority will always choose the "right" thing because it is in their self-interest. I believe there is strong historical precedent where the economic majority have both willing selected and been coerced into decisions that are against their own interests, and so I place less confidence in the decisions of the economic majority. I prefer a strong rules based system that is out of the hands of man, and fear anything else will be influenced negatively over time.

Bitcoin issuance is not limited to 21 million coins because of the protocol, but because of the exit-democratic consensus of the economic majority. It is incorrect to say we have moved from an era of control by central bankers to an era of control by mathematics. We have moved to an era of control by the economic majority.

Fully agree that in the end the 21M limit exists because the majority chooses for it to exist, not solely because of the protocol.

Disagree that the limit will remain because the economic majority will protect the limit. If that was true, please explain how they broke the gold standard? The economic majority of physical gold holders were against it, they massively lost out in the default, and yet it still happened. If you look at the history, after the default they were no longer the economic majority (because they were devalued) and no longer had control. The economic majority shifted to the government which could now create wealth out of thin air and have everyone go along "because crisis".

If let's say hypothetically the government declared a fork with 210M coins, they would now control 189M coins, a clear economic majority. They could also convince the majority of people to go along because the government would offer those 189M coins as various "services" to voters. The economic majority you described, would no longer be a majority and would now be a very small economic minority.  This is not a hypothetical, it is history and has already happened. If you walk through the mechanics of the 1933 default it follows the outline above.

Point is, I don't believe a demographic majority want the principles of sound money, and if bitcoin ever takes hold there will be a multitude of attacks. The main protections against this are to have bitcoin be used directly as much as possible (i.e. own wallet, not through circle.com services) and to have forks be rare events making it harder to push regulation/etc into bitcoin. Part of the reason they were able to break the gold standard is people had already stopped using physical gold directly, and mostly only used paper gold, and thus they had no method to resist the changes. If in 1932 people still mostly used physical gold for transactions and not paper gold dollars, I think the 1933 default would have been much more difficult.

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March 16, 2015, 07:21:40 PM
 #22024

Fiatcoin is nearly here:

http://www.reuters.com/article/2015/03/12/us-bitcoin-ibm-idUSKBN0M82KB20150312\

Quote
Unlike bitcoin, where the network is decentralized and there is no overseer, the proposed digital currency system would be controlled by central banks, the source said.

"These coins will be part of the money supply," the source said. "It's the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain."

Nice.  Now they won't even have to turn on the printing presses.  Just type in a big number and hit enter.

I'm assuming this means we then get accurate insight into exactly what the money supply is. No more shadowstats! No more government handwaving about inflation!

Not such a bad thing?

Just a guess but fiatcoin's blockchain will probably be private, all clients essentially just client/server so money supply is obfuscated.  Likely devices won't hold their private keys, or there will be a master private key that can spend from all accounts.  No other way for the government to freeze accounts, implement asset forfeiture, etc.
Melbustus
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March 16, 2015, 07:41:01 PM
 #22025

Fiatcoin is nearly here:

http://www.reuters.com/article/2015/03/12/us-bitcoin-ibm-idUSKBN0M82KB20150312\

Quote
Unlike bitcoin, where the network is decentralized and there is no overseer, the proposed digital currency system would be controlled by central banks, the source said.

"These coins will be part of the money supply," the source said. "It's the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain."

Nice.  Now they won't even have to turn on the printing presses.  Just type in a big number and hit enter.

I'm assuming this means we then get accurate insight into exactly what the money supply is. No more shadowstats! No more government handwaving about inflation!

Not such a bad thing?

Just a guess but fiatcoin's blockchain will probably be private, all clients essentially just client/server so money supply is obfuscated.  Likely devices won't hold their private keys, or there will be a master private key that can spend from all accounts.  No other way for the government to freeze accounts, implement asset forfeiture, etc.


Fedcoin is obviously a dumb idea. It's effectively the same level (or worse) of why-are-you-bothering-with-a-blockchain as doing a gold or silver "backed" cryptocurrency. If you have a fundamentally centralized system, then adding a blockchain just makes it more complex for no reason. Just fire up some servers and make a good API instead.

People *still* don't understand the problem that blockchains actually solve.

Bitcoin is the first monetary system to credibly offer perfect information to all economic participants.
But Bitcointalk & /r/bitcoin are heavily censored. bitco.in/forum, forum.bitcoin.com, and /r/btc are open.
Best info on Casascius coins: http://spotcoins.com/casascius
cypherdoc
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March 16, 2015, 07:47:48 PM
 #22026

Fiatcoin is nearly here:

http://www.reuters.com/article/2015/03/12/us-bitcoin-ibm-idUSKBN0M82KB20150312\

Quote
Unlike bitcoin, where the network is decentralized and there is no overseer, the proposed digital currency system would be controlled by central banks, the source said.

"These coins will be part of the money supply," the source said. "It's the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain."

Nice.  Now they won't even have to turn on the printing presses.  Just type in a big number and hit enter.

I'm assuming this means we then get accurate insight into exactly what the money supply is. No more shadowstats! No more government handwaving about inflation!

Not such a bad thing?

Just a guess but fiatcoin's blockchain will probably be private, all clients essentially just client/server so money supply is obfuscated.  Likely devices won't hold their private keys, or there will be a master private key that can spend from all accounts.  No other way for the government to freeze accounts, implement asset forfeiture, etc.


Fedcoin is obviously a dumb idea. It's effectively the same level (or worse) of why-are-you-bothering-with-a-blockchain as doing a gold or silver "backed" cryptocurrency. If you have a fundamentally centralized system, then adding a blockchain just makes it more complex for no reason. Just fire up some servers and make a good API instead.

People *still* don't understand the problem that blockchains actually solve.

Yep, we are still so early.

Frankly, I'm amazed at the low level of sophisticated analysis coming out of IBM regarding Bitcoin. But then again, I bet much of it is being driven by Richard Gendal whom I have been even less impressed.

Perhaps IBM is a quintessential example of a big corporation who's benefited so greatly from inflation that they've been blinded.
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March 16, 2015, 08:22:09 PM
 #22027


As you stated, bitcoin is a more democratic form of money, where the economic majority have a voice and a small group cannot control the system. This is one of the most beautiful aspects of the system. Additionally any minority of users can always choose to stay on the ledger/path they choose.


Any democratic system of money is far inferior to Bitcoin.  It is fundamentally the opposite of that, it is an economic system.
An occurrence of democratic action is seen as a threat to Bitcoin, AKA 51% attack.

Voting is in all cases the supreme failure of an attempt to create quality.  Where there is quality, voting is not needed.  Voting is for avoiding violent conflict by replacing it with as much as possible with social conflict.  It is the use of law against others, and it is for subjugating minorities.  We in democratic societies are taught how wonderful it is to have democracy, and it is better than most any other option, but it is also utter crap.  I do not wish for a "democratic" system of money and I am very happy that Bitcoin isn't one.

It is a failing of Gold, that there exists a gold fix, where a small group vote on the price.  There is only democracy in a monetary system to the extent that the system lacks quality.  It is a sign of failure, not success.

FREE MONEY1 Bitcoin for Silver and Gold NewLibertyDollar.com and now BITCOIN SPECIE (silver 1 ozt) shows value by QR
Bulk premiums as low as .0012 BTC "BETTER, MORE COLLECTIBLE, AND CHEAPER THAN SILVER EAGLES" 1Free of Government
Zangelbert Bingledack
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March 16, 2015, 08:35:52 PM
 #22028

Disagree that the limit will remain because the economic majority will protect the limit. If that was true, please explain how they broke the gold standard?

Isn't this just the difference between a geographically selected community where a central government is in control (the US population) and a non-territorial self-selected community where the economic-majority "decentralized governance" is in control (Bitcoin)?

In other words, isn't this in some sense just the question of statism vs. anarchy, or centralization vs. decentralization, restated? The whole idea of economic majority control only works because of the exit dynamic afforded by the decentralized nature of cryptoledgers.

It seems to me that insofar as you buy the argument that decentralization or non-territorialism, wherein this voice/exit dynamic gets maximum play, is superior to centralization and territorial monopolies of power wherein you cannot exit without physically emigrating, you would also buy my argument in the long post above that there is nothing to fear from forkability.

As an example, if when the gold standard was broken people could choose to fork off and keep the gold standard, regardless of being geographically located in the United States, the legislation could not have passed, or if it did it wouldn't have been effective - at least not for those in the population who care about sound money. The economic majority among US citizens may have supported going off the gold standard, but then there is still a minority who want to keep the gold standard. In a statist system, the minority is the minority and gets overridden; in an anarchic system, the economic minority simply becomes the economic majority of a smaller community and retains the system they prefer. (If they deem their differences sufficient to make it worth breaking away.)

The economic majority of physical gold holders were against it, they massively lost out in the default, and yet it still happened.

Reiterating the above point for clarity, this tragedy happened because the gold holders weren't allowed to "exit in place," and I assume they weren't in fact allowed to exit US territory at all (with their gold). This is a problem of statism, but Bitcoin is not a statist system. In Bitcoin the economic majority, or perhaps we can refine the phrasing even further and say each economic community (defined by their similar beliefs about what is ideal money), can always choose their own fork.

My "economic majority" phrasing becomes a little confusing here because we must continually ask, "A majority among whom?" A large enough minority with enough difference of opinion from the majority will break away and become the economic majority of a community of people who agree with their values. There are still reasons why each little economic community with varying beliefs about ideal money will not necessarily fork off: size is an advantage, voice can still work if the minority makes convincing arguments, etc.

The main thing I want to point out is that there is a set of implications in this shift from mostly voice-only territorial democratic control to fully-enabled location-independent voice+exit control,* in other words there is a set of implications of the exit dynamic getting full play for the first time, and I think these implications haven't been fully understood or at least not fully internalized.

Note: Although I'm arguing in this vein, I don't even think I myself have fully internalized the implications of now having a real exit option available at all times. I feel like I can see some of them implicitly but I'm not sure I could articulate the full set of implications yet. I'd like the above arguments hinting at some of the counterintuitive implications to be fleshed out and made more explicit, perhaps through further debate. The semantic challenges this new idea poses are also pretty formidable: the term "majority" becomes fluid in a way we aren't used to, for instance, as mentioned above, and even the term "Bitcoin" develops a dynamic character that at first feels unsettling.

*I'll quit using the term "exit-democracy" for this, to avoid confusion, because I think the associations of the word democracy to voting (voice) are just too strong.
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March 16, 2015, 08:56:30 PM
 #22029

Fiatcoin is nearly here:

http://www.reuters.com/article/2015/03/12/us-bitcoin-ibm-idUSKBN0M82KB20150312\

Quote
Unlike bitcoin, where the network is decentralized and there is no overseer, the proposed digital currency system would be controlled by central banks, the source said.

"These coins will be part of the money supply," the source said. "It's the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain."

I don't get it... Isn't this taking the worst of both worlds?

PGP key molecular F9B70769 fingerprint 9CDD C0D3 20F8 279F 6BE0  3F39 FC49 2362 F9B7 0769
rocks
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March 16, 2015, 09:06:52 PM
 #22030

Fiatcoin is nearly here:

http://www.reuters.com/article/2015/03/12/us-bitcoin-ibm-idUSKBN0M82KB20150312\

Quote
Unlike bitcoin, where the network is decentralized and there is no overseer, the proposed digital currency system would be controlled by central banks, the source said.

"These coins will be part of the money supply," the source said. "It's the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain."

I don't get it... Isn't this taking the worst of both worlds?

Oh, you got it.

They are going to try and create a centralized black-box system that has all the negatives of fiat money combined with the negatives of bitcoin (trace-ability, etc), and a demographic majority will go along. (You're not for terrorism, child molesters or drug dealers are you). It's not a matter of if, but when.
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March 16, 2015, 09:08:06 PM
 #22031

Fiatcoin is nearly here:
http://www.reuters.com/article/2015/03/12/us-bitcoin-ibm-idUSKBN0M82KB20150312\

Quote
Unlike bitcoin, where the network is decentralized and there is no overseer, the proposed digital currency system would be controlled by central banks, the source said.
"These coins will be part of the money supply," the source said. "It's the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain."

I don't get it... Isn't this taking the worst of both worlds?
Actually it is. What did you expect? The government to make something that would actually be helpful to the people?  Cheesy
They've been manipulating, spying, using us and whatnot.

This was not a 'if question' but a 'when'.


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rocks
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March 16, 2015, 09:27:02 PM
 #22032

My "economic majority" phrasing becomes a little confusing here because we must continually ask, "A majority among whom?" A large enough minority with enough difference of opinion from the majority will break away and become the economic majority of a community of people who agree with their values. There are still reasons why each little economic community with varying beliefs about ideal money will not necessarily fork off: size is an advantage, voice can still work if the minority makes convincing arguments, etc.

Here is where I personally think this runs into problems. Again I'll use the gold default as a historical example. Here after FDR defaulted it was perfectly possible for a minority of people to refuse the new fiat system and still transact with each other using the old system (physical gold). The problem was the minority of people (gold bugs) was too small to be effective, they were marginalized and the majority of the world moved on without them.

I don't think the "community of people who agree with their values" will necessarily be large enough, if history is any guide (which I believe it is).


As you stated, bitcoin is a more democratic form of money, where the economic majority have a voice and a small group cannot control the system. This is one of the most beautiful aspects of the system. Additionally any minority of users can always choose to stay on the ledger/path they choose.

Any democratic system of money is far inferior to Bitcoin.  It is fundamentally the opposite of that, it is an economic system.
An occurrence of democratic action is seen as a threat to Bitcoin, AKA 51% attack.

Voting is in all cases the supreme failure of an attempt to create quality.  Where there is quality, voting is not needed.  Voting is for avoiding violent conflict by replacing it with as much as possible with social conflict.  It is the use of law against others, and it is for subjugating minorities.  We in democratic societies are taught how wonderful it is to have democracy, and it is better than most any other option, but it is also utter crap.  I do not wish for a "democratic" system of money and I am very happy that Bitcoin isn't one.

The problem is Bitcoin exists within a system of demographically elected governments (supposedly), and this system will try to impose it's will either on bitcoin or on the population. The easier and more common it is to change bitcoin, the easier it is for a demographically elected government (or any gov) to co-opt bitcoin.

This thread started with a statement that making bitcoin easy to fork often will be a good thing. My argument is be careful what you wish for because it there are powerful forces which will try to change it into something against it's founding principles.

This is why I stated I prefer that bitcoin remains a rules based system as much as possible outside of the influence of man. The more we enable forking to be common, the more that breaks down and the easier it become for governments to push regulation/etc in.
cypherdoc
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March 16, 2015, 09:57:47 PM
 #22033

My "economic majority" phrasing becomes a little confusing here because we must continually ask, "A majority among whom?" A large enough minority with enough difference of opinion from the majority will break away and become the economic majority of a community of people who agree with their values. There are still reasons why each little economic community with varying beliefs about ideal money will not necessarily fork off: size is an advantage, voice can still work if the minority makes convincing arguments, etc.

Here is where I personally think this runs into problems. Again I'll use the gold default as a historical example. Here after FDR defaulted it was perfectly possible for a minority of people to refuse the new fiat system and still transact with each other using the old system (physical gold). The problem was the minority of people (gold bugs) was too small to be effective, they were marginalized and the majority of the world moved on without them.

I don't think the "community of people who agree with their values" will necessarily be large enough, if history is any guide (which I believe it is).


As you stated, bitcoin is a more democratic form of money, where the economic majority have a voice and a small group cannot control the system. This is one of the most beautiful aspects of the system. Additionally any minority of users can always choose to stay on the ledger/path they choose.

Any democratic system of money is far inferior to Bitcoin.  It is fundamentally the opposite of that, it is an economic system.
An occurrence of democratic action is seen as a threat to Bitcoin, AKA 51% attack.

Voting is in all cases the supreme failure of an attempt to create quality.  Where there is quality, voting is not needed.  Voting is for avoiding violent conflict by replacing it with as much as possible with social conflict.  It is the use of law against others, and it is for subjugating minorities.  We in democratic societies are taught how wonderful it is to have democracy, and it is better than most any other option, but it is also utter crap.  I do not wish for a "democratic" system of money and I am very happy that Bitcoin isn't one.

The problem is Bitcoin exists within a system of demographically elected governments (supposedly), and this system will try to impose it's will either on bitcoin or on the population. The easier and more common it is to change bitcoin, the easier it is for a demographically elected government (or any gov) to co-opt bitcoin.

This thread started with a statement that making bitcoin easy to fork often will be a good thing. My argument is be careful what you wish for because it there are powerful forces which will try to change it into something against it's founding principles.

This is why I stated I prefer that bitcoin remains a rules based system as much as possible outside of the influence of man. The more we enable forking to be common, the more that breaks down and the easier it become for governments to push regulation/etc in.



yeah, i think i agree with the bolded part.  the more forks, the more fragmentation of the community.  we need numerical concentration in the long run.

and the fact is, Bitcoin is almost where it needs to be in terms of economic properties.  ideally, we might have faster tx times and better anonymity but what we have currently is pretty good and accomplished with a little effort.

to your point about why did gold get co-opted; the answer is simple.  gold is simply a poor form of money and has been failing the people for decades now.  you can only store it and hope it retains its value.  meanwhile, gold has no means of regular auditing nor of transacting across distances, let alone in a timely manner.  the best you can do with it is bury it in a vault after digging it up, as Wences is fond of saying.  Bitcoin, otoh, truly exists across time and space while its supply is hard coded.  transacting across the globe in an instant is commonplace.  hiding it and securing it, i would submit, is easier than gold with the proper knowledge.  thus, it's money properties vastly exceed those of gold and will thus make it much more resilient to any nation state attempting to kill it.  

furthermore, b/c it is global, it harnesses the natural governmental conflict that exist today and for evermore.  this is why i think the Chinese gvt has not killed all the branches of the Bitcoin economy within its borders.  it probably realizes that one day they might have no choice but to acquiesce to Bitcoin, which would be the next best choice if they can't have the yuan become the world reserve currency.  knocking the dollar off its mantle would be good enough.  having both the mining and exchange majority volume will come in handy should that day come.
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March 16, 2015, 10:10:49 PM
 #22034

...

Fedcoin is obviously a dumb idea. It's effectively the same level (or worse) of why-are-you-bothering-with-a-blockchain as doing a gold or silver "backed" cryptocurrency. If you have a fundamentally centralized system, then adding a blockchain just makes it more complex for no reason. Just fire up some servers and make a good API instead.

People *still* don't understand the problem that blockchains actually solve.

Yep, we are still so early.

Frankly, I'm amazed at the low level of sophisticated analysis coming out of IBM regarding Bitcoin. But then again, I bet much of it is being driven by Richard Gendal whom I have been even less impressed.

Perhaps IBM is a quintessential example of a big corporation who's benefited so greatly from inflation that they've been blinded.


Well, Richard Brown does understand the spectrum of decentralization, at least (eg, he acks that Ripple is not like Bitcoin in terms of credible decen, etc). My own feeling right now, though, is that there's far less room for middle-ground projects (wrt level of decentralization) than people think (incl Mr. Brown). Essentially, I think people will begin to realize that if a system (eg Fedcoin) fundamentally cannot exhibit "pure" decentralization like Bitcoin, it might as well just be a centralized application and not bother with the blockchain stuff. Too many people think you can have both worlds, but I don't think that actually makes sense. All you get is the worst of both, not the best.

The other sort of decentralization you can do (such as with practical byzantine consensus - which was effectively solved in 1999) is for redundancy, not explicitly attack resistance or credible anonymous decentralization. So I think you get three main buckets that have utility longrun:

1) Centralized systems. Like fiat money.

2) Redundant systems, that run some sort of practical byzantine consensus (pdf) alg, or alt-consensus like Ripple. Something which doesn't make a good independent money at all (since its "rules" couldn't be considered credible), but which might be fine for some other uses. This stuff, to me though, is thoroughly in the not-that-interesting pile, since it basically amounts to an evolution in ways to redundantly link server clusters. That's it. The guys running HyperLedger and Eris will spout off about how much more it is, but I really don't see. As Vitalik notes, this stuff is just a "friggin database technology". And for this class of system, that's *all* it is.

3) Bitcoin-style pure credible decentralization. For when you can't trust anyone. Money, permanent global record of authority, etc.


[disclaimer: above thoughts are very rough....I'm in a hurry right now]

Bitcoin is the first monetary system to credibly offer perfect information to all economic participants.
But Bitcointalk & /r/bitcoin are heavily censored. bitco.in/forum, forum.bitcoin.com, and /r/btc are open.
Best info on Casascius coins: http://spotcoins.com/casascius
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March 16, 2015, 10:12:39 PM
 #22035

the more forks, the more fragmentation of the community.  we need numerical concentration in the long run.

There a conflict here though. What we need is more numerical participants, not just numerical concentration of a relatively tiny number of participants. Bitcoin at its current scale of usage will just wither and die (or be leapfrogged) if it doesn't grow a lot, so concentration of the existing users is fairly pointless. I don't think anyone disagrees with this?

The context of forking was allowing more rapid technical innovation, with the economic assumption that most participants would relatively quickly concentrate on one fork anyway, making that the successor.

If that economic assumption turns out to be untrue, then it is obviously the case that the needs of some participants or potential participants are very poorly served by one of the forks, and overall growth will suffer by failing to address those underlying needs.


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March 16, 2015, 10:25:46 PM
 #22036

the more forks, the more fragmentation of the community.  we need numerical concentration in the long run.

There a conflict here though. What we need is more numerical participants, not just numerical concentration of a relatively tiny number of participants. Bitcoin at its current scale of usage will just wither and die (or be leapfrogged) if it doesn't grow a lot, so concentration of the existing users is fairly pointless. I don't think anyone disagrees with this?

The context of forking was allowing more rapid technical innovation, with the economic assumption that most participants would relatively quickly concentrate on one fork anyway, making that the successor.

If that economic assumption turns out to be untrue, then it is obviously the case that the needs of some participants or potential participants are very poorly served by one of the forks, and overall growth will suffer by failing to address those underlying needs.




i am referring to numerical growth and concentration of participants worldwide into the exisitng Bitcoin mainchain to maximize tx fees as we transition away from block rewards.  this is essential.

forking is a tricky term and the concepts depend on how you define it.  hard forks incorporating new innovations are fine as long as they are truly needed and the only effort needed is to download new software.  but if it also forces participants to dig out cold wallets and make financial transfers to new coins or new sidechains, that is a big problem.  many ppl will get left behind and will lose money.
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March 16, 2015, 10:27:25 PM
 #22037

forking is a tricky term and the concepts depend on how you define it.  hard forks incorporating new innovations are fine as long as they are truly needed and the only effort needed is to download new software.  but if it also forces participants to dig out cold wallets and make financial transfers to new coins or new sidechains, that is a big problem.  many ppl will get left behind and will lose money.

As Zangelbert Bingledack defined it, existing participants would not need to do anything. They could just sit back with their cold storage coins and see which fork wins out, their ledger position guaranteed.
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March 16, 2015, 10:56:37 PM
 #22038

forking is a tricky term and the concepts depend on how you define it.  hard forks incorporating new innovations are fine as long as they are truly needed and the only effort needed is to download new software.  but if it also forces participants to dig out cold wallets and make financial transfers to new coins or new sidechains, that is a big problem.  many ppl will get left behind and will lose money.

As Zangelbert Bingledack defined it, existing participants would not need to do anything. They could just sit back with their cold storage coins and see which fork wins out, their ledger position guaranteed.


yeah, but to rocks point, we shouldn't want uncertainty in a money created by numerous forks causing constant choices.  ppl don't want that headache.  when you say "just sit back with their cold storage coins and see which fork wins out", you're essentially saying the forks are close in properties (or at least difficult to choose between).  one group is going to lose money as one chain continues onward and eventually peters out as it becomes clear that the other chain is superior.  that would not be good as that would result in losses.  the reason i think this happens is that when it comes to the network of global money, i think the market will converge to one out of convenience, efficiency, and simplicity. sort of how the USD has been outright adopted by many countries today.  it's easy.

hard forks are not to be created lightly.  i realize that is not what ZB was advocating.
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March 16, 2015, 11:03:45 PM
 #22039

when you say "just sit back with their cold storage coins and see which fork wins out", you're essentially saying the forks are close in properties (or at least difficult to choose between).

No I'm kind of saying the opposite. If they are not close in properties then one will quickly win out, and I think we all agree that is not a problem at all. It isn't a problem for passive participants, nor active ones.

The minority of cases where the choice is more difficult, you basically have two choices. One is to pick one or the other (including status quo) essentially by fiat, or recognize that these decisions are difficult and let a market sort it out. I argue it is more important to do that now, when Bitcoin is tiny, rather than suffer long term from having made the wrong choice earlier when the costs of change were relatively insignificant.

I don't think we disagree that stability is important, I just think that stability at the multi-trillion dollar cap scale is better served by letting things sort out robustly and dynamically at the billion dollar scale, even if that introduces more risk short term (indeed that risk is what allows it to happen).

Take this whole block size thing. It's pretty clear no consensus will ever be reached. Doing nothing is an arbitrary decision. Making a change to 20 MB or 20 MB + {some growth rate} is also arbitrary. We're not going to "figure this out." I say let the market play out with the toy system we have today and whichever system thrives will be far stronger at the trillion dollar scale.

Also, with respect to new participants losing money, that is fairly easy for them to avoid. Just buy both forks in equal proportion. That puts them in the same immunized position as existing holders with cold storage. If you don't do that you are making a bet on which fork is going to win. There is nothing wrong with making bets, but no one is forced to make this bet, and every bet has a winner and a loser.

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March 17, 2015, 12:51:53 AM
 #22040

Fiatcoin is nearly here:

http://www.reuters.com/article/2015/03/12/us-bitcoin-ibm-idUSKBN0M82KB20150312\

Quote
Unlike bitcoin, where the network is decentralized and there is no overseer, the proposed digital currency system would be controlled by central banks, the source said.

"These coins will be part of the money supply," the source said. "It's the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain."

Nice.  Now they won't even have to turn on the printing presses.  Just type in a big number and hit enter.

I'm assuming this means we then get accurate insight into exactly what the money supply is. No more shadowstats! No more government handwaving about inflation!

Not such a bad thing?

Just a guess but fiatcoin's blockchain will probably be private, all clients essentially just client/server so money supply is obfuscated.  Likely devices won't hold their private keys, or there will be a master private key that can spend from all accounts.  No other way for the government to freeze accounts, implement asset forfeiture, etc.


Fedcoin is obviously a dumb idea. It's effectively the same level (or worse) of why-are-you-bothering-with-a-blockchain as doing a gold or silver "backed" cryptocurrency. If you have a fundamentally centralized system, then adding a blockchain just makes it more complex for no reason. Just fire up some servers and make a good API instead.

People *still* don't understand the problem that blockchains actually solve.

Yep, we are still so early.

Frankly, I'm amazed at the low level of sophisticated analysis coming out of IBM regarding Bitcoin. But then again, I bet much of it is being driven by Richard Gendal whom I have been even less impressed.

Perhaps IBM is a quintessential example of a big corporation who's benefited so greatly from inflation that they've been blinded.

If IBM manages to create fiatcoin then it will be great step for bitcoin.
 - Using atomic swaps  bitcoin <-> fiatcoin we do not need 3d party exchanges.  It is 1. step how to convert fiat into Bitcoin.
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